US Oil Drillers Added Rigs For 2nd Week In A Row
July 10 (Reuters) - U.S. energy firms added five oil rigs this week, the second week of increases in a row, despite a 19 percent collapse in U.S. crude prices from a recent high, data showed on Friday, a sign drillers were ready to return to the well pad.
The gains came after 29 consecutive weeks of declines, bringing the total rig count up to 645, the most since late May, oil services company Baker Hughes Inc said in its closely followed report.
U.S. crude oil futures were close to entering a bear market earlier this week when prices fell over 9 percent to as low as $50.58 a barrel from a recent high over $62 in early May.
Analysts said prices this week collapsed in part due to oversupply concerns with U.S. energy firms starting to drill again, a falling Chinese stock market, failing talks between Greece and its euro zone creditors, and worries over the status of negotiations between Iran and world nuclear powers.
On Friday, crude futures traded between $52 and $54 a barrel in see-saw trade as the market reacted to news of a stock exchange rally in China, new proposals by the Greek government to end the stand-off with European creditors, and as talks with Iran missed another deadline.
Those bullish market events were offset on Friday by the International Energy Agency's bearish call that the market bottom may still be ahead for oil as the Organization of the Petroleum Exporting Countries (OPEC), the United States and others continue producing crude at near record levels despite lackluster world demand.
U.S. crude futures fell 60 percent from over $107 in June 2014 to near $42 in March due to those same oversupply worries and uninspiring demand growth.
In response to that 60 percent price collapse, U.S. drillers eliminated thousands of jobs and idled 60 percent of the record high 1,609 oil rigs that were active in October.
But last week's oil rig count increase showed that when U.S. crude prices average $60 a barrel like during May and June, several drillers, including Pioneer Natural Resources Co , plan to ramp up activity.
"We view the spring rally in prices to $60 a barrel as premature and self-defeating as it will ultimately lead to higher U.S. production," analysts at Goldman Sachs said in a note.
Despite the cuts, U.S. crude production averaged 9.6 million barrels per day for a seventh week in a row, its highest level since the early 1970s, according to government data.
(Reporting by Scott DiSavino; editing by Marguerita Choy)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- Macquarie Strategists Expect Brent Oil Price to Grind Higher
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- Pennsylvania County Joins List of Local Govts Suing Big Oil over Climate
- UK Oil Regulator Publishes New Emissions Reduction Plan
- PetroChina Posts Higher Annual Profit on Higher Production
- US, SKorea Launch Task Force to Stop Illicit Refined Oil Flows into NKorea
- McDermott Settles Reficar Dispute
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- USA Commercial Crude Oil Inventories Increase
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Oil Demand Outpaces Expectations, Testing Calculus on Peak Crude
- House Passes Protecting American Energy Production Act
- TotalEnergies Restarts Production in Denmark's Biggest Gas Field
- USA Oil and Gas Job Figures Jump
- Republican Lawmakers Say IEA Has Abandoned Energy Security Mission
- Blockchain Demands Attention in Oil and Gas
- Houthis Warn Saudi Arabia of Retaliation If It Backs USA Attacks
- Macquarie Sees USA Oil Production Exiting 2024 at 14MM Barrels Per Day
- Summer Pump Prices Set to Hit $4 a Gallon Just as Americans Hit the Road
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Equinor Makes Discovery in North Sea
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension